1) Field of the Invention
The present invention is related to the field of electronic banking systems, and in particular, electronic systems for facilitating the opening of accounts for customers.
2) Description of Related Art
A bank often offers a range of account types, such as money market accounts, savings accounts, and certificates of deposit, that provide a return, in the form of interest, on the principal deposited by a customer. The bank then typically loans or invests the deposited funds in an attempt to garner a percentage rate of return that is in excess of the interest awarded to the customer. Income is earned from the difference between the interest rates, so the bank is under pressure to make the difference as large as possible. On the other hand, the bank may fail to attract borrowers if it does not charge interest rates low enough on loans to compete with other lenders. Further, a bank must award high enough interest rates on its accounts to attract deposits. Even if revenue is earned on the differential, administrative costs will reduce the net profit from the revenue. Lowering administrative costs, therefore, creates a large benefit for the bank by increasing its net profit margins and allowing it to award higher interest rates to depositors and charge lower interest rates for loans.
The original method for opening an interest bearing account was for the customer to send a letter containing personal information and a check for the deposit amount. However, the process of deciphering the customer's handwriting is difficult and prone to error. As an alternative, the bank can send a fulfillment package to the customer containing an application for the account. The application provides a more readable format for the customer's request to open the account. Despite the improvement in readability, data from the application must still be entered into a database and errors during transcription of the application are not uncommon.
Each time an account is opened, the personal banker opening the account on the customer's behalf must determine an interest rate. To facilitate rate determination, the bank periodically publishes several rate sheets that include lists of approved rates. The personal banker uses various factors, such as the type of account, the term of the deposit and the amount of the deposit to locate the appropriate rate on the rate sheets. The number of rate sheets and the amount of variables that must be considered can result in errors in rate determination
The personal banker may be given leeway to modify the interest rates indicated on the rate sheets. When determining whether to modify the interest rate, the personal banker can take into account several factors, such as the total balance in the customer's existing accounts or the length of the customer's relationship with the bank. Despite the leeway to negotiate rates up front, each rate exception must be carefully considered before approval because improperly awarded rate exceptions can have a large effect on profitability. Each rate exception must be approved by a supervisor and personal banker. Rate exceptions that are outside of predetermined guidelines are sent to a treasury department for further review and approval. In addition, all rate exception materials are sent to a new account center for auditing and electronic recording. As can be seen from its description, the rate exception process requires multiple approvals and is therefore a costly administrative process.
In addition to the transcription and rate determination processes described above, the opening of new accounts generally involves many other manual processes each performed by different banking personnel. For instance, the opening of an account can also include auditing to ensure accuracy, inspections for fraud, reconciliation of funds and distribution of informational materials about the account, such as a welcome kit, to the customer. The bank may also run promotions that either credit the customer with additional funds or additional basis points. The promotions may run for a specific period of time and would apply based on specific personal or account information. Each of these processes must be implemented and documented with accuracy to ensure that each account is opened expeditiously and with a minimum of errors.
It would be advantageous to have a system for opening accounts that minimizes administrative costs without an undue amount of errors. It would be further advantageous to have a process for recording account opening requests that is easy, fast and reliable. It would also be advantageous to have a rate determination process that allows for an accurate, but flexible, determination of rates. In addition, it would be advantageous to have an integrated auditing and fraud inspection process that allows the bank to verify the correct entry and validity of various customer and account information.